Does Sage Creek mine have a future?
Peabody Sage Creek mine has a date with Routt County for renewal of coal hauling permit
Steamboat Springs — Even as Peabody Energy officials in St. Louis work to close the sale of company coal mining assets in Colorado and New Mexico to Bowie Resource Partners early next year for $358 million, the management team at Peabody’s Twentymile Coal Company in Routt County is taking steps to ensure that the partially completed, but idled, Peabody Sage Creek Mine remains in play.
Recent communication from Peabody with Routt County officials about renewal of a permit at Sage Creek, signals the company — along with its new owners — wants to take measures to mine coal here for as long as 20 to 30 years in the future.
Peabody Sage Creek Mining LLC will appear before the Routt County Planning Commission on Dec. 17 seeking to renew a permit due to expire early next year, which would allow the company to haul coal from Sage Creek along county roads to a washing plant. This time, local Peabody officials are hoping to expand the current five-year permit to a 10-year permit.
The hearing later this month may appear routine on the surface. However, in an Oct. 9 letter to Routt County Planning Director Chad Phillips, written long before the pending sale was announced, Twenty Mile Coal’s senior environmental specialist Scott Cowman acknowledged that even thought it’s idle at this time, Sage Creek could extend the life of operations in Routt County for 15 to 20 years beyond the life of the newly opened Wolf Creek seam in Twentymile Mine.
“It is intended that once underground reserves are depleted at Twentymile (seven to 10 years from now) mining will continue at Peabody Sage Creek Mine,” Cowman wrote. “PSCM also serves as a contingency plan if issues arise with mining the Wolf Creek seam. And it is possible, depending on market conditions, that mining could resume (at PSCM) before Wolf Creek reserves are depleted.
“Coal from PSCM would therefore replace or augment the supply to existing and potential new customers and extend the life of operations in Routt County for an additional 15 to 20 years,” Cowman explained.
Reached by telephone Tuesday, Cowman said he wasn’t free to comment further on the letter or the company’s intentions.
Sage Creek, located just northwest of the existing Twentymile Mine along Routt County Road 27, was Peabody’s primary focus in Northwest Colorado five years ago, and the company spent $2 million to build a 200-foot-in-diameter traffic roundabout to allow it to safely haul more coal through the intersection of county roads 27 and 27A.
No coal has been hauled from the new mine, though Cowman acknowledged to Phillips that there are tentative plans to haul an existing pile of coal from Sage Creek that accumulated during construction of a new portal and mine entry development at the mine, which has since been put on hold.
As Twentymile officials looked beyond the sale Peabody’s assets in Routt County, the Web page, The Motley Fool reported the parent company continues to look for ways to reduce its $6 billion in debt in a period of low coal prices, suggesting it may not be done looking for buyers for its assets including coal reserves.
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